The Quadpay founders say Merrill Lynch had a conflict of interest, because they were also working for Zip. Juicy.
Background: QuadPay are a buy now, pay later service that launched in the US back in 2017. And in 2020, they were acquired by Aussie BNPL Zip for a whopping $400 million.
What happened: Just after QuadPay was acquired….the founders sold almost 13 million shares in Zip on the advice of a company named Merrill Lynch. But the founders are now saying that advice was conflicted.
What else: Ya see Merrill Lynch were also working for Zip as a corporate adviser. And the QuadPay founders claim that the type of share sale recommended (ie a block trade) made Merrill Lynch more commission too. Juicy, juicy stuff.
💡A block trade is the sale or purchase of a large number of shares at an arranged price between two parties.
💡Because these trades are so big (i.e. more than 10,000), they can significantly impact the company’s share price. So, to reduce this impact, block trades generally take place outside of the normal market opening times.
💡Block trades also need to be initiated by big investment companies, called blockhouses (like Merrill Lynch). But with Merrill Lynch working for the QuadPay founders and Zip, we can see how tensions have risen.
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